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Laker Company reported the following January purchases and sales data for its only product. The Company uses a periodic inventory system. For specific identification, ending inventory consists of 224 units, where 180 are from the January 30 purchase, 5 are from the January 20 purchase, and 39 are from beginning inventory. Date Activities Jan. 1 Beginning inventory Jan. 10 Sales Jan. 20 Purchase Jan. 25 Sales Jan. 30 Purchase Totals Units Acquired at Cost Units sold at Retail 152 units @ $6.00 = $ 912 72 units @ $5.00 = 180 units @ $4.50 = 404 units Assume the periodic inventory system is used. Required: 360 810 $2,082 88 units@ $15.00 92 units @ $15.00 180 units Exercise 5-4 (Algo) Periodic: Gross profit effects of inventory methods LO A1 1. Compute gross profit for the month of January for Laker Company for the four inventory methods. 2. Which method yields the highest gross profit? 3. Does gross profit using weighted average fall between that using FIFO and LIFO? 4. If costs were rising instead of falling, which method would yield the highest gross profit?

Laker Company reported the following January purchases and sales data for its only product. The Company uses a periodic inventory system. For specific identification, ending inventory consists of 224 units, where 180 are from the January 30 purchase, 5 are from the January 20 purchase, and 39 are from beginning inventory. Date Activities Jan. 1 Beginning inventory Jan. 10 Sales Jan. 20 Purchase Jan. 25 Sales Jan. 30 Purchase Totals Units Acquired at Cost Units sold at Retail 152 units @ $6.00 = $ 912 72 units @ $5.00 = 180 units @ $4.50 = 404 units Assume the periodic inventory system is used. Required: 360 810 $2,082 88 units@ $15.00 92 units @ $15.00 180 units Exercise 5-4 (Algo) Periodic: Gross profit effects of inventory methods LO A1 1. Compute gross profit for the month of January for Laker Company for the four inventory methods. 2. Which method yields the highest gross profit? 3. Does gross profit using weighted average fall between that using FIFO and LIFO? 4. If costs were rising instead of falling, which method would yield the highest gross profit?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Complete this question by entering your answers in the tabs below. Req 1 Compute gross profit for the month of January for Laker Company for the four inventory methods. Note: Round cost per unit to 2 decimal places and final answers to the nearest whole dollars. Sales Cost of goods sold Gross profit Req 2 to 4 Show Transcribed Text Reg 1 $ Req 2 to 4 LAKER COMPANY For Month Ended January 31 Specific Identification 0 $ Complete this question by entering your answers in the tabs below. Weighted Average 0 $ 2. Which method yields the highest gross profit? 3. Does gross profit using weighted average fall between that using FIFO and LIFO? 4. If costs were rising instead of falling, which method would yield the highest gross profit? 2. Which method yields the highest gross profit? 3. Does gross profit using weighted average fall between that using FIFO and LIFO? 4. If costs were rising instead of falling, which method would yield the highest gross profit? < Req 1 Req 2 to 4 > FIFO LIFO Yes FIFO 0 $ LIFO
Transcribed Image Text:Complete this question by entering your answers in the tabs below. Req 1 Compute gross profit for the month of January for Laker Company for the four inventory methods. Note: Round cost per unit to 2 decimal places and final answers to the nearest whole dollars. Sales Cost of goods sold Gross profit Req 2 to 4 Show Transcribed Text Reg 1 $ Req 2 to 4 LAKER COMPANY For Month Ended January 31 Specific Identification 0 $ Complete this question by entering your answers in the tabs below. Weighted Average 0 $ 2. Which method yields the highest gross profit? 3. Does gross profit using weighted average fall between that using FIFO and LIFO? 4. If costs were rising instead of falling, which method would yield the highest gross profit? 2. Which method yields the highest gross profit? 3. Does gross profit using weighted average fall between that using FIFO and LIFO? 4. If costs were rising instead of falling, which method would yield the highest gross profit? < Req 1 Req 2 to 4 > FIFO LIFO Yes FIFO 0 $ LIFO
Use the following information for the Exercises below. (Algo) [The following information applies to the questions displayed below.] Laker Company reported the following January purchases and sales data for its only product. The Company uses a periodic inventory system. For specific identification, ending inventory consists of 224 units, where 180 are from the January 30 purchase, 5 are from the January 20 purchase, and 39 are from beginning inventory. Activities Date Jan. 1 Beginning inventory Jan. 10 Sales Jan. 20 Purchase Sales Jan. 25 Jan. 30 Purchase Totals Units Acquired at Cost 152 units @ $6.00 = $ 912 72 units @ $5.00 = 180 units @ $4.50 = 404 units 360 Assume the periodic inventory system is used. Required: Units sold at Retail 88 units @ $15.00 92 units @ $15.00 810 $2,082 180 units Exercise 5-4 (Algo) Periodic: Gross profit effects of inventory methods LO A1 1. Compute gross profit for the month of January for Laker Company for the four inventory methods. 2. Which method yields the highest gross profit? 3. Does gross profit using weighted average fall between that using FIFO and LIFO? 4. If costs were rising instead of falling, which method would yield the highest gross profit?
Transcribed Image Text:Use the following information for the Exercises below. (Algo) [The following information applies to the questions displayed below.] Laker Company reported the following January purchases and sales data for its only product. The Company uses a periodic inventory system. For specific identification, ending inventory consists of 224 units, where 180 are from the January 30 purchase, 5 are from the January 20 purchase, and 39 are from beginning inventory. Activities Date Jan. 1 Beginning inventory Jan. 10 Sales Jan. 20 Purchase Sales Jan. 25 Jan. 30 Purchase Totals Units Acquired at Cost 152 units @ $6.00 = $ 912 72 units @ $5.00 = 180 units @ $4.50 = 404 units 360 Assume the periodic inventory system is used. Required: Units sold at Retail 88 units @ $15.00 92 units @ $15.00 810 $2,082 180 units Exercise 5-4 (Algo) Periodic: Gross profit effects of inventory methods LO A1 1. Compute gross profit for the month of January for Laker Company for the four inventory methods. 2. Which method yields the highest gross profit? 3. Does gross profit using weighted average fall between that using FIFO and LIFO? 4. If costs were rising instead of falling, which method would yield the highest gross profit?
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